Walter Energy

Walter Energy, Inc. based in Birmingham, Alabama, is a producer and exporter of metallurgical, or coking, coal for the global steel industry. The company also produces steam and industrial coal, metallurgical coke, and coal bed methane gas.

In December 2010, Walter Energy agreed to buy Canada’s Western Coal Corporation for C$3.3 billion (US$3.3 billion). The combined entity will have total coal reserves of about 385 million tons and be the world’s largest publicly traded “pure-play” metallurgical coal producer. The company expects to produce more than 20 million tons a year by 2021.

Divisions
The company's metallurgical coal business, Jim Walter Resources (JWR), is the southernmost Appalachian coal producer. The company was formed in 1977 from the former Coke, Iron and Chemicals Division of U.S. Pipe & Foundry Company.

JWR mines coal from Alabama's Blue Creek seam. JWR has grown from a small producer of less than 1 million tons of coal per year, produced solely for use in its sister company's coke ovens, into one of the 25 largest coal producers in the United States, with 6.3 million tons of coal sold in 2008 and plans to expand production to more than 9 million tons in 2010. Its mines are two of the deepest vertical shaft coal mines in North America. The mines also produce a significant quantity of coal bed methane gas, extracted and sold to market in a joint venture operation with Sonat Coal Gas Inc., a unit of the former energy conglomerate Sonat Inc.

Walter Energy is also the parent company of Walter Minerals, an Alabama-based surface coal producer with a capacity of nearly 1.5 million tons, which produces coal for the Alabama steam and industrial coal markets.

Walter Coke, the company's fuel coke producer, manufactures coke for use in blast furnaces and foundries. The company is headquartered in Birmingham, Alabama and was formerly known as Sloss Industries.

History
The company was formerly known as Walter Industries, Inc. and changed its name to Walter Energy in April 2009. The predecessor company was founded by Tampa entrepreneur the late James W. Walter, Sr. in 1946. It spun off Mueller Water Products in 2006, closed Jim Walter Homes in 2009, also spinning off Walter Investment Management Corporation in 2009.

In December 2010, Walter Energy said it will buy Vancouver's Western Coal for $3.3 billion -- a deal that will create one of the world's largest producers of steel-making coal. Western Coal's president and CEO, Keith Calder, said world steel production is expected to grow by 50 per cent over the next decade, and the combined company expects to boost production by more than 45 per cent over the next few years. Prices for coking, or steelmaking, coal sold to Asia is projected to rise 8 percent in 2011, as estimated by UBS AG. According to Ian Henderson, who manages about $7 billion at JPMorgan Chase including Western Coal shares: “We were long-term investors in this particular project, but we thought the company was too lowly valued. We are not expecting anybody else to come in and counter bid.”

Three weeks after buying Western Coal, Walter Energy bought a shipping terminal in Alabama to "have unconstrained shipping capacity," according to interim Chief Executive Joe Leonard. The company has three coal projects in Alabama, and bought the assets of Mobile River Terminal Co from a unit of U.S. Steel for an undisclosed price. The facility is located less than four miles from the McDuffie Terminal where Walter Energy ships all of its coal to customers in South America and Europe. As of 2010, Mobile River Terminal handles 3.2 million tons of iron ore, 1 million tons of furnace coke, and 0.5 million tons of other products annually, according to its website.

On March 11, 2011, Walter Energy said it had agreed to buy the North River mine in Fayette County from Chevron. Walter also said it had leased about 75 million tons of Blue Creek coking coal reserves in Tuscaloosa County from a subsidiary of Chevron. Royalty rates are in line with existing agreements, Walter said.

Coal mines and projects
Western Coal's operating mines and potential projects are:


 * Perry Creek mine is located approximately 30 kilometres from the town of Tumbler Ridge, in northeast British Columbia. The mine produces approximately 2 million tonnes a year of metallurgical coal;
 * Brule mine is located 45 kilometres south of a railroad mainline near the town of Chetwynd, in northeast British Columbia. The mine produces approximately 1.5 million tonnes of ultra-low volatile pulverized coal injection (ULV-PCI) coal for steelmaking;
 * Willow Creek mine is located 45 kilometres west of the town of Chetwynd, in northeast British Columbia. The mine is an open cut operation which produces approximately 500,000 tonnes a year of hard coking coal and low-volatile PCI coal for steelmaking. The company has applied to expand the mine to produce 1.7 million tonnes a year.
 * Belcourt and Saxon project are owned by Belcourt-Saxon Coal Limited Partnership, a joint venture of Western Coal and Peace River Coal. The undeveloped coal deposits are located 65 to 125 kilometres south of Tumbler Ridge in northeast British Columbia.
 * Maple Coal's operates are located 32 kilometres east of Charleston, West Virginia. The operations include the Eagle underground mine, which produces a premium high volatile metallurgical coal for US domestic and export steel making markets, and the Sycamore open cut mine which produces thermal coal for power generation in the US eastern seaboard. The Eagle mine produced approximately 400,000 tonnes in 2010 with the company planning to increase that to 1.0 million tonnes in 2012.
 * Gaugley Eagle property, which is 145 kilometres from Charleston, West Virginia. The proerty consists of the Black Pearl underground mine and the Lower Muddlety open cut mine.

Alabama Coal port expansion
The Alabama State Port Authority has announced $360M to be spent over five years to improve infrastructure at the Port of Mobile, and hopes that two customers - Drummond Company and Walter Energy - will pay for a proposed $9.5 million project to add export capacity at the Alabama McDuffie Coal Terminal. On Feb. 22, 2011, authority members voted to give state docks Director Jimmy Lyons the power to contract for a second shiploader at the terminal if he can reach an agreement with the Drummond Company and Walter Energy to pay for it by accepting a surcharge on top of the fees they normally pay to export coal through the terminal. The amount of metallurgical coal shipped from the Port of Mobile is rising due to increased demand from overseas steelmakers and widespread flooding in Australia in 2010, which shut down several coal mines there.

Demand for export coal is increasing so much that Birmingham-based Walter had recently purchased the Mobile River Terminal for $35 million to increase its shipping capacity. Company officials said that they still planned to use McDuffie as well. McDuffie has two shiploaders, but one of them is broken. Lyons said McDuffie currently has capacity to export between 10 million tons and 12 million tons of coal a year. A new shiploader, to be built by Shanghai-based ZPMC, would expand capacity by about 50 percent. If Drummond and Walter do not agree to a surcharge to fund the improvements, the facility will reportedly continue to operate with one shiploader.

Contact Information
Walter Energy, Inc. 4211 W. Boy Scout Blvd. Tampa, Florida 33607 Phone: (813) 871-4811 Website: http://www.jimwalterresources.com/

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External Articles
Cateogry:Coal mining accidents